The Red Sole Mark

By Fallon S., Corinne S., and Catherine K.

   Just a cursory glance through a fashion magazine will show an image of one of the most widely known ladies’ shoe designs. Scores of celebrities line red carpets and grace the pages of magazines wearing the same brand of high-fashion heels. They have come to signify fashion, glamour, and status. One particular feature of this brand shouts to the world who the producer is – the shoes’ bright red soles. Even most male consumers can recognize that these famous shoes come from one specific source – Christian Louboutin.

   In Christian Louboutin v. Yves Saint Laurent, Inc., 778 F.Supp.2d 445 (S.D.N.Y. 2011), a New York District Court judge, Victor Marrero, denied Louboutin a preliminary injunction against an American competitor, Yves Saint Laurent (YSL). Louboutin moved for an injunction to stop YSL from allegedly infringing Louboutin’s trademark by selling YSL’s own red sole shoes.

   Mr. Louboutin began coloring the outsoles of his women’s shoes in 1992 with a glossy “Chinese red” in order to give the line of shoes “energy” and because he regarded the color as “engaging, flirtatious, memorable and the color of passion.” He invested large amounts of capital to promote the shoes and to build a reputation as a high-fashion women’s shoe designer. The fashion industry responded so positively to the shoe that the name Louboutin nearly became synonymous with the term “high-fashion” and became a fixture in A-list celebrity culture. The name is also featured heavily in pop-culture through songs, television shows, and movies.

   However, Judge Marrero, of the New York Federal District Court, still refused to grant the preliminary injunction on the grounds that he believes Louboutin’s trademark registration for the use of lacquered red outsoles does not merit protection under the Lanham Act, a federal statute governing trademark laws in the United States.  The Lanham Act protects “any word, name, symbol, or device, or any combination thereof… which a person has a bonafide intention to use in commerce and applies to register… to identify and distinguish his or her goods from those manufactured and sold by others and to indicate the source of the goods.”    

   The United States Patent and Trademark Office had awarded Louboutin a trademark on January 1, 2008. Louboutin approached YSL in January 2011, taking issue with four YSL shoe designs, which bear red soles as part of a monochromatic red design. YSL refused to withdraw the shoe designs, leading Louboutin to file action under the Lanham Act asserting amongst other things, trademark infringement. In order to qualify for Lanham Act protection, Louboutin must demonstrate that the Red Sole Mark merits protection and that YSL’s use of the similar red sole is “likely to cause confusion” as to the origin of the shoes.

   Judge Marrero, however, was of the opinion that Louboutin has no likelihood of success on the merits of trademark infringement.  The judge explained that even though a color can sometimes be trademarked when the color has attained a secondary meaning, if that color is also functional then it is not entitled to trademark protection. A color being functional means that the color is essential to the use or purpose of the product, the color affects the cost, or the color affects the quality of the product.  The judge reasoned that unlike industrial markets where colors are often trademarked to indicate the source (e.g. pink insulation or yellow post-its), in the fashion market, color is also used for ornamental or aesthetic purposes. Judge Marrero distinguished other fashion cases where colors were trademarked based on the fact that they were applied to the arrangement of the colors to create distinct and recognizable images, rather than a single color like the “Red Sole Mark” at issue in the Louboutin case.

   A plausible argument can be made for Louboutin that Judge Marrero focused too much on framing the issue as trademarking the color red in general. Clearly no fashion designer would ever be able to trademark one particular color for general purposes. The issue in the Louboutin case might reasonably be framed as Louboutin’s desire to trademark a particular color that is displayed in such a way and in such a strategic manner on a shoe, that it is more like an arrangement of colors and therefore should be allowed trademark protection. Although the outsole is not an arrangement of various colors, the single red shade is in fact arranged and placed on the shoe in such a way as to create a “distinct and recognizable image purposefully intended to identify [Louboutin] while at the same time serving as an expressive, ornamental, and decorative concept.” Id. at 451.

   Judge Marrero also asserts that placing an “off limits sign on any given chromatic band by allowing one artist or designer to appropriate an entire shade…” would unduly hinder commerce and competition. Again, however, the judge might not be  giving sufficient weight to the argument that Louboutin is not trying to “appropriate an entire shade”, but is asking to trademark the application of a shade of color to a very specific part of the product.  Such a use would not put the shade of red off limits entirely to shoe designers.

   Lastly, Judge Marrero places importance on the fact that Louboutin himself described the choice of color as giving the shoes “energy” and because it’s “engaging”, “sexy”, and “attracts men to the women who wear [his] shoes.” The judge believes that these adjectives signify that the red outsoles are in fact “functional” and therefore not protectable. While this analysis may have merit, it could be argued that this analysis takes Louboutin’s use of these adjectives much too literally. Just because those words, taken in their most literal sense, can indicate a type of function does not mean that Louboutin was using them in this sense. Artists often describe the feelings and aesthetic qualities of art pieces as energetic, engaging, and sexy. These qualities do not amount to functionality, they are merely descriptive words similar to “pretty” and “cute”.  In no way is something functional because it is “cute”.   In terms of functionality, the red soles are not essential to the use or purpose of the product (color of soles is not essential to whether one can walk in them or not) and the red soles do not affect the cost or the quality of the product (it is the name “Louboutin” that makes the shoes pricey, not the color.  A simple Google search turns up other shoes with colorful soles selling at around $60 USD, proving it is not the color that brings in the bucks.)

   As for YSL’s counterclaims, their strongest argument may be that of Unfair Competition. If YSL is in fact “known” for its monochromatic shoe designs and it is prevented from ever using red soles, then the designer would never be able to produce monochromatic red shoes.  However, weighing the claims against each other, it is not surprising that Louboutin has decided that it will take the case all the way to the Supreme Court, if necessary.  Louboutin’s red sole mark is its signature. The red soles have acquired a secondary meaning and they serve to identify the source of the shoes.

   The Red Sole Mark has arguably attained one of the strongest secondary meanings that exist in the fashion world. Refusal to protect that mark could allow other designers to follow suit and enjoy a windfall from Louboutin’s artistic creativity and ingenious marketing decision.

   On the flipside, Louboutin’s trademark protects “a lacquered red sole on footwear”.  The registration covers all women’s high fashion designer footwear, which encompasses all styles of shoes.  It wouldn’t be unfair to say that the trademark description seems to be overly broad.  It is confusing as to whether “china red” is protected, whether the lacquer or gloss is protected, whether either would be protected without the other.   Lastly, perhaps the court can simply require Louboutin to narrow their trademark description, thus allowing YSL to enjoy their piece of the pie too?  We will have to wait and see how this case will affect trademarking colors in the fashion industry.

Burning Man's Intellectual Property Terms and Conditions

By Jacob R.

   Burning Man Organization (BMO) describes its annual, weeklong experience in the Nevada desert as an experiment in radical self-expression and self-reliance. For most Burning Man participants (“Burners”), this means taking a short break from the everyday routine of working as a lawyer, barista, or any other profession that does not completely fulfill the human desire to dress in steampunk attire, build post-apocalyptic floats, and cheer on the burning of a large wooden effigy. However, the actions of a few who exploited this safe space for radicalism, provoked BMO in recent years to enforce a strict contract policy to protect the privacy of its participants and to promote the creative goals of the festival. In effect, this policy limits dissemination of photography and video created at the festival and only until a recent change in its language, restricted participants’ traditional intellectual property rights.

           

   BMO's old terms prior to 2011, permitted the display of photographs and videos taken at the festival by participants for personal use, but restricted any third-party display or dissemination of the works. It achieved this by requiring participants to automatically assign copyright of photos or videos taken at Burning Man once any of these works were used for any other purpose than strict personal use.  BMO terms also reserved a right to prevent any videos or photographs of the festival on any public websites if it objected. An advantage to this policy of automatic assignment is that it allowed BMO to use the DMCA takedown process to censor Burning Man images on the Internet. This provides a much quicker route to censorship than spending time negotiating publicity and privacy rights claims as the basis of a takedown.

   Curiously, the old, strict policy additionally prevented ticket holders from using the Burning Man trademark on any website or making any trademark fair use of the mark. Meaning that facebooking, tweeting, and blogging the Burning Man name would be considered a violation of the BMO policy.

   While the limitations of traditional intellectual property rights may seem harsh in BMO's pre-2011 policy, there are legitimate reasons why BMO restricts public Internet access to images of the festival. In the late 1990's and early 2000's over the course of five years, Voyeur Video Inc. videotaped twenty-seven hours of nudity at Burning Man, selling the tapes for $29.95. BMO responded by suing for trespass, invasion of privacy, and publication of private facts. Voyeur Video's exploitation of the radical self-expression threatened the ideals of Burning Man, alarmed the community of Burners, and resulted in the creation of BMO's strict intellectual property policy.

   Recently, BMO changed its policy for the 2011 festival and slightly loosened its restrictions on the dissemination of photography and video from Burning Man festival. Now, ticket-holders and BMO share joint ownership in photographs and videos taken at the festival. Therefore, BMO can still use DMCA takedown methods at will to enforce its censorship of the images of the festival, but participants retain certain rights to control their works. Ticket-holders possess the right to share their works under a creative commons Attribution-Non-Commercial-Share-Alike license. This allows sharing and derivative uses of works so long as they are not for commercial purposes. Also, BMO changed its restrictive language regarding trademarks to permit its ticket-holders to make fair use of Burning Man's trademarks.

   Copyright law is justified in the Constitution as a means to promote artistic expression by creating an incentive for artists to acquire a property right in their work for a limited period of time. Interestingly, BMO also seeks to promote expression in its intellectual property policy, albeit a “radical self-expression,” by protecting its participants from being viewed and judged from the world outside of Burning Man. The type of radical, spontaneous behavior promoted by Burning Man, such as participants running around the desert naked with glitter paint and a ski mask, differs from the type of fixed, tangible expression protected in contemporary copyright law, such as a painting or a photograph. Therefore, it makes sense to adopt a policy to protect this form of radical self expression that competes with copyright law. However, the Burning Man community should continue to seek an acceptable balance to its policy of protecting its ideals with any desire participants may have to distribute expressive works of photography and videography created at the event.

Apple v. Apple: 30 Years in Court

By Joanna L.

   Apple makes over $65 billion in yearly revenue, sits on an enormous pile of cash, and will take anyone to court who tries to threaten a dime of it. With over 300 registered trademarks and service marks, Apple has created a lot of its wealth from this mark ownership (along with Apple’s patents, copyrights, etc).  The tech giant has registered font names (“Chicago,” “New York,” and “Geneva”), words beginning with “i” (“iMovie,” “iCal,” “iLife,” “iMac,” “iPod,” “iPad”), and slogans (“There’s an app for that.”).

   Between January 2008 and May 2010, Apple, Inc. filed over 350 cases with the US Patent and Trademark Office. Most of these are in regards to the use of words like “apple,” “pod,” and “safari.”  Ironically, a lot of these have been directed at actual apple sellers. However, a brand like Apple needs to keep an eye on the bottom-line for shareholders and protect its name and reputation. At times, it seems Apple goes too far in asserting trademark rights, but that’s for the courts to decide… if they ever get to court! Apple has been known to get a lot of cases settled with those piles of cash I mentioned. But this is nothing new for the company – in fact, one suit lasted 30 years.

   In 1978, the Beatles’ record company, Apple Corps. sued Apple Computers (they changed it to Apple, Inc. in 2007 to reflect its growing line of products) for trademark infringement for use of the name “Apple” for their new computer company. The parties settled in 1981 with $80,000 paid to Apple Corps., and added a condition: Apple Computer agreed not to enter the music business and Apple Corps. agreed not to enter the computer business. Seems simple enough, right? Not so…

   Apple Computer added MIDI, other audio recording capabilities, and a synthesizer sound chip to its new Apple II line of computers in 1986. In 1989, Apple Corps. sued citing a breach of their prior agreement and the court agreed. The decision effectively ended the Apple II line and all further development of advanced, built-in musical hardware.  However, the Apples found themselves pitted against each other yet again in 1991 when Apple Computer sampled a sound system called “Chimes” and added it to the Macintosh operating system. Once again the parties settled, but this time for $26.5 million and a new set of guidelines for future use of the word “Apple” and the apple logo. Apple Corps retained the right to use "Apple" or their apple logo on any "creative works whose principal content is music."Apple Computer retained the right to use "Apple" or their apple logo on "goods or services...used to reproduce, run, play, or otherwise deliver such content," as long as it isn't on physical media (like a CD). Later, Apple Computer would rename “Chimes,” calling it “Sosumi,” pronounced “So-sue-me.”

   

   When Apple started developing the iTunes Music Store, the company became nervous about breaching the agreement and offered Apple Corps. $1 million in 2003 for use of “Apple” in conjunction with the digital music service. The Beatles turned them down only to see the online music store launched with the “Apple” name anyway. Cue massive lawsuit. But, surprise! Apple Computer wins this time - essentially, the computer company prevailed because they argued that the issue turned on whether they were a service supplier or a content carrier. In 2006, the court said that they were only acting as a service supplier, and based on the wording of the previous agreement, it was found that "no breach of the trademark agreement [had] been demonstrated." Apple Corps was ordered to pay over $2 million to Apple Computer in legal fees. The Beatles appealed and nothing new about the dispute surfaced. However, in the 2007 keynote address given by Steve Jobs, Apple’s CEO, the Beatles were featured throughout the presentation. One month later, it was announced that the two companies had reached a new agreement: Apple, Inc. would own all trademarks related to "Apple" and the respective logos. Apple, Inc. agreed to license back to Apple Corps certain trademarks for their continued use. Soon after, Apple started selling the Beatle’s catalog on iTunes. Some have speculated that the Beatles were paid $500 million to end the dispute and allow the sales.

   Apple has been involved in many trademark suits over the years, and it seems will continue to be as long as they operate. Some of the claims seem almost silly at first glance, but in examining the dispute with Apple Corps., I hope I’ve explained one of the more interesting ones. With companies like Apple expanding its services and products every day, who knows how far these trademark and service mark suits will go…

The Value of a “-book”: Facebook v. Teachbook

 By Carlos R.

   On August 18, 2010 Facebook, Inc., better known as Facebook.com, one of the world’s most popular Internet websites, filed a federal lawsuit against Teachbook.com LLC alleging trademark infringement due to the use of Teachbook.com’s “-book” suffix in its registered domain name. This will be a case of first impression in the Northern District of California, and will test the ability of wholly online services to trademark otherwise generic portions of their domain name.

   This suit against Teachbook is the main warning shot of a carefully launched campaign against other social networking websites that use the “-book” suffix in their domain names. Besides this  suit other sites that received cease and desist letters from Facebook to refrain from using “-book” in their name were Placebook, Redneckbook, Doctorbook, Vetbook, and Geezerbook. Many of these sites complied and were taken down. Teachbook may have been specifically targeted because it was planning a large nation-wide launch in the fall of 2010 and has explicitly advertised itself as an alternative to Facebook for teachers.

   Another targeted site, Lamebook, recently turned the tables and filed their own proactive trademark proceedings in the Western District of Texas against Facebook. Lamebook seeks declaratory judgment it is protected by the free speech element of the First Amendment as a parody and that it is a non-competitor of Facebook since it does not offer any social networking services.

   Many tech commentators on the Internet have suspected that Facebook's campaign was coordinated as a response to the release of David Fincher and Aaron Sorkin’s largely unflattering film adaptation of the events that led to the foundation of Facebook titled The Social Network. The lawsuit may also have much to do with the fact that many in Silicon Valley are betting on social networking websites expanding in the future and that Facebook sought to make a clear statement that it will protect its trademark name from dilution and infringement from imitators at all costs.

   Trademark law differs from copyright and patent law in that for a trademark to be  enforceable it must be in use in the marketplace. The central theories behind trademark law is that a mark will help identify goods in the marketplace and serve the dual purpose of protecting consumers from being tricked by imitator goods and also giving the owners of the mark a cause of action against competitors who piggyback off the success of the original mark to sell their own goods. A mark is considered "in use" once it is a recognizable indicator of a particular good in the marketplace. Marks can be things such as words, logo designs, colors, sounds, smells, or any combination of features that accomplishes the purpose of identifying one good.

   Words are often tricky to trademark because they can easily be found to be “generic” and not subject to trademark protections. Generic words are common or descriptive terms. For example a trademark for “apple” would be impossible to establish if one was selling apples. However, the more unique the mark to the good the better chance of success in obtaining a trademark. If one used the term “apple” to establish a mark in the computer hardware world they have a much higher likelihood of being successful (if not for the fact that Steve Jobs has gotten there first.)

   Domain names online may be considered trademarks because domain names are the central tool used by online consumers to access online goods and services. Facebook is operating under the central theory that they have established use in the marketplace and registered the name “Facebook” as a trademark for the purpose of online social networking.

   In the August 18th complaint against Teachbook the plaintiffs made two primary accusations against Teachbook.

   First, Facebook alleges trademark infringement based on the fact that the suffix “-book” causes Facebook and Teachbook to sound similar which may lead to confusion. They also claim Teachbook is directly competing for the same market pool as both Facebook and Teachbook operate online and both offer social networking to working professionals.

   Second, Facebook alleges dilution of its name brand. Facebook claims that Teachbook will weaken the strength of Facebook’s name, which has been expensive to build and maintain. Allowing a direct competitor to piggyback off the name recognition of Facebook, particularly through the use of “-book” in its domain name, will allow others to do the same and weaken the overall name brand of Facebook. The key wording here is that adding the term “-book” to the Teachbook domain name is wholly arbitrary to the function of it’s service as a social networking site for teachers, and that the only possible explanation for its use is to make consumers identify it through Facebook’s own name.

   The dilution cause of action may clearly be the stronger of the two. A similar case was decided in the fast food world earlier this year in Malaysia, where the nations highest court ended a lengthy eight year court battle between McDonalds and McCurry, an Indian-food based fast food chain. The allegations by McDonalds were very similar to the allegations made by Facebook, particularly to how the prefix “Mc-” was being used by McCurry to cause confusion among consumers and piggyback off McDonald’s name brand. For it’s own part McCurry claimed the “Mc” stood for “Malaysian Chicken” and that they were not direct competitors with McDonalds as they did not sell American fast food. The Malaysian court bought both of these arguments and found no infringement on McCurry’s part.

   The Facebook v. Teachbook case however will be fought in the Northern District of California. American Federal Courts are known to more friendly to intellectual property holders than courts in other areas of the world. It will be interesting to see which direction the court decides to go with. A win on Facebook’s part could shut down any running social networking site with the suffix “-book” and give Facebook a complete monopoly on the name and, in many ways, protect it from any competitors whose presence might be healthier for the marketplace. On the other side a win by Teachbook might open a floodgate for competitors to drown out any current value of “-book” in Facebook’s name and possibly spread the trend to other popular domain names.

   In either case the court will have a difficult time parsing through the worth of suffixes and prefixes on domain names and what value they have to the overall value of the name. I expect this will become an important issue as the Internet marketplace grows in the future. This is a case to keep an eye on.

Proving Trademark Dilution: Special Challenges in Survey Evidence

By Ian B.

Over the last decade of Intellectual Property litigation, trademark dilution by blurring has become an increasingly popular plaintiff’s claim for a multiplicity of reasons: the non-necessity of showing confusion, the increased judicial recognition of pre-sale and post-sale consumer impressions, the enactment of the Federal Trademark Dilution Act and a more recent Supreme Court ruling on its construction all contribute to the attractiveness of making such a dilution claim.

However, the increasing popularity of simply ‘tossing in’ a blurring claim along with more structured assertions of confusion, has also created a vast amount of uncertainty as to what needs to be proven to sustain such claims of dilution and how the blurring claim should be proven.

What follows is a brief discussion of some of the relevant issues involved when attempting to present a successful empirical showing of trademark dilution by blurring.

THE BASIC REQUISITE SHOWINGS

At the outset it is worth noting that there are two necessary elements which must be effectively proven to sustain any claim of trademark dilution. The first necessary element is fame of the mark. In many cases a showing of fame is a mere formality because the concerned plaintiff is a widely recognized entity with vast commercial exposure.

In some cases, however, the concerned plaintiff’s mark may not be wholly distinct from other famous marks of a similar nature or its fame may be relegated to a certain region or demographic. It is generally established that nationwide fame is the requisite showing, but with the wide accessibility of internet commerce and exposure, plaintiffs frequently argue that marks which might otherwise be famous only in a certain region, are in fact recognizable on a national if not worldwide level. This, along with the fact that many marks may only be famous in a given set of consumer-demographics, has led to the use of survey evidence, even at this most basic threshold stage, to establish a dilution claim.

While creation and use of such surveys is not an uncertain practice itself, the presence of such surveys (particularly where the chosen route is to establish secondary meaning) can complicate the design and defense of surveys which may later be necessary to make a showing of ‘actual dilution’ as opposed to simple association. Frequently a strong empirical showing of secondary meaning necessary to establishing fame can end up weakening an assertion of an actual loss of distinctiveness in the concerned mark where such a showing will be necessary to meeting a court’s requirement to demonstrate dilution via loss of selling power.

The issue of fame aside, all claims of trademark dilution must also be based upon a second necessary element: a senior and a junior mark which are ‘similar.’ For dilution, only the marks themselves must be similar. This presents a stark contrast to establishing similarity when making a confusion claim (confusing similarity) which usually requires not only similar marks, but also similar products and/or business channels or other showings under the standard Sleekcraft Factors.

In short, claims of trademark dilution require only a showing of fame and a showing similarity of the concerned marks and the threshold for these showings, while sometimes a bit complicated, is not especially high. For this reason, dilution claims, and particularly claims based upon blurring, are frequently made upon a wide range of actual consumer associations and the existence of actual harm may remain speculative. Hence, the courts have applied a variety of standards in determining whether or not a prima facie assertion of dilution is in fact indicative of actual blurring. The only certainties which have been offered to date are a handful of elements which the Supreme Court has deemed as not necessary to actually establish a dilution claim.

UNNECESSARY ELEMENTS

Prior to the enactment of the 1996 Federal Trademark Dilution Act (FTDA), standards for trademark dilution were governed entirely by state laws. After the implementation of the FTDA, trademark dilution effectively became the province of federal law, and while the certain standards reflected in prior state laws such as the requisite elements of fame and similarity were retained, other aspects of the federal law were uncertain because rulings were inconsistent.

In response to these inconsistencies, the Supreme Court eventually heard Moseley v. Victoria’s Secret Catalogue, Inc., 537 U.S. 807. The Court’s ruling in Moseley clarified the following standards and limitations in regard to sustaining a claim for trademark dilution:
1. Dilution may only be based upon a claim of actual dilution, likelihood of dilution is insufficient.
2. Showing confusion, either a likelihood or actual, is not necessary in proving dilution.
3. Whether or not the senior and junior mark holders are competitors is not a limiting factor.
4. Showing actual loss of sales is not a requisite element to proving dilution.

The Court in Moseley did an excellent job in outlining what claims and elements of proof could not and did not need to be used to sustain a claim of dilution, but as to blurring it offered precious little guidance in terms of what a plaintiff should show in order to prove a loss of distinctiveness or how any requisite showings could be properly supported. This presents us with the current post-Moseley landscape, in which, as will now be discussed, there is vast uncertainty as to what standard judges will expect or apply when assessing a claim for trademark dilution by blurring. It has largely become an ‘anything goes’ atmosphere and many famous mark holders and plaintiff’s attorneys are struggling to find any sort of predictability to the manner in which they must prove their claims of trademark dilution. In brief, the present picture is as follows.

A FREE-FOR-ALL OF ASSOCIATION

In so far as marketplace association is concerned, the traditional model of dilution has historically been that at the point of sale, a consumer would see the defendant’s mark and by its similarity to the plaintiff’s famous mark, would make an association with the plaintiff’s mark thereby diluting its distinctiveness. This model is no longer the standard.

Judicial recognition of actionable commercial association either prior to or after the point of sale, coupled with increasingly effective arguments in consumer psychology studies based upon an aggregate marketplace experience, have led courts to accept a variety of associations and respective effects as being potentially indicative of dilution by blurring. Today it is just as probable that blurring may be proven by showing the traditional association ‘defendant’s mark recalls plaintiff’s mark’ as it is by the reverse.

This broadened scope of acceptable types of association to substantiate dilution is due in part to the aforementioned factors but is also a result of the Court’s observation in Moseley that dilution does not require an actual showing of loss of sales. Upon this assumption, attorneys have increasingly turned their attention to making convincing and creative showings of association alone, arguing that this in and of itself can evidence actual dilution.

The problem is that many courts still hold that dilution is not proven unless an actual loss of distinctiveness in terms of lost selling power is shown. This raises the question as to how one can show a loss of distinctiveness through a loss of selling power without having to actually show lost sales. It is upon this hurdle that many of the most convincing forms of association surveys get tripped up. The result is a lack of standardization in how to actually construct and execute a dilution survey and an increasing reticence among plaintiff’s attorneys to rely solely on such surveys when trying to formulate a convincing presentation of empirical evidence to prove dilution by blurring.

This relative open-endedness and uncertainty in how to effectively prove dilution has not only reduced the frequency with which surveys are relied upon by plaintiffs, but it has created a variety of approaches in how to conduct effective dilution surveys. Issues such as the potentially diminished value of a survey in the overall association model, persistent problems of cost, decreased attractiveness in the face of alternative empirical methods and predictable characterizations of flaws and bias by opposing experts, are all issues which must be accounted for in survey construction. In lieu of these issues, what follows is a short list of a few of things which should be done when designing and implementing a trademark dilution survey aimed at proving actual dilution by blurring.

WHAT TO DO

1. Use a diverse and size appropriate population: Diversity of the survey population is a crucial element to guarding against the inevitable assertion by opposing counsel that the design is flawed.
2. Implement sufficiently dissimilar controls: Control subjects which are too similar to the marks at issue will uniformly open the design to attack; the risk vs. reward is disproportionate any other way.
3. Use a double-blind method: To prevent allegations of clear bias, both the administrators and the survey participants must be ignorant of the purpose of the survey.
4. Reduction for noise: This is merely a standard methodological practice in proper survey analysis.
5. Focus only on the element to be proven: If the survey is to support blurring, design the survey to optimize the chance of showing reduced distinctiveness and selling power, don’t try to produce evidence of secondary meaning or confusion by the same design.
6. Lead without leading: A clever survey design must increase the chance that participants will indicate the desired response but the approach must be extremely subtle, opposing counsel will be constantly vigilant for bias.
7. Don’t overreach: The strength of survey results or the survey design must never be presumed as unassailable, a prudent approach assumes that flaws will be found and corroborative evidence will be necessary.
8. Account for marketplace realities: Every design must mimic the actual consumer experience as closely as possible; it is better to slightly sacrifice desirable results than to expose to survey to invalidation too easily due to an unrealistic design.
9. Be ready to fight it out: At the end of the day, every survey will be deemed “fatally flawed.”

BEYOND A BASIC BLURRING DESIGN: THE CONUNDRUM OF TRADE DRESS

Surveys to prove dilution of a trademark by blurring are feasible albeit lacking in a standard approach which is predictably known to be effective. Records of case law and various practice guides indicate that certain models are recognized to be optimal given certain situations and there is a reasonable degree of published discussion on the subject of dilution surveys generally. This said, as detailed above, prudent attorneys seldom approach the problem of proving trademark dilution by relying on a single survey as the sole form of empirical evidence to support their case. Increasingly the typical approach employs a survey along with some actual evidence of sales records of the plaintiff both before and after the introduction of a defendant’s mark into the marketplace and/or an extensive opinion by a well-versed consumer psychologist to support the assertion that association alone can and will lead to diminished selling power via a loss of distinctiveness.

In the case of a claim for dilution of trade dress, the picture is far less well developed. In fact, there are essentially no published opinions offering any record of a successfully designed and litigated consumer survey which has actually been deemed to prove dilution of trade dress by blurring. Simply put, trade dress claims are less frequently brought than trademark claims or they are brought in tandem. Claims for dilution of trade dress are rarer still, and there are only a handful of published cases in which a survey to support an assertion of dilution of trade dress by blurring has actually been considered or attempted.

This presents a very interesting caveat in an otherwise reasonably well documented area of legal study: How to design and use a consumer association survey to effectively yield empirical evidence of actual dilution in trade dress by blurring? The cases outlined below have at least touched on the issue.

THE ELUSIVE TRADEDRESS DILUTION SURVEY: CASES WHICH ARE CLOSE

Nabisco, Inc. v. PF Brands, Inc., 50 F. Supp. 2d 188 (S.D.N.Y., 1999): In Nabisco the dispute involved the popular ‘Goldfish crackers’ and a planned product to promote the cartoon ‘Cat-Dog’ featuring a variety of animal shaped crackers including one of a fish which was very similar in appearance to ‘Goldfish.’ The overall circumstances of the case presented an excellent opportunity to design and conduct a trade dress dilution survey which would likely have ended in a winning showing for the plaintiff, but the planned survey in the case was derailed when Nabisco failed to comply with a discovery order to produce the requisite units of ‘Cat-Dog’ crackers for Pepperidge Farm to conduct its proposed analysis. As such the survey was scrapped and its proposed design was never published.

Gibson Guitar v. Paul Reed Smith Guitars, 423 F. 3d 539 (C.A. 6, 2005): In Gibson the dispute was between two guitar makers for a similarly shaped ‘swoop-cleft’ design which constituted a substantial portion of the right side of the front face of a guitar. The basic facts of the case presented a seemingly good opportunity to conduct an effective survey for dilution of trade dress but the survey was never produced as Gibson lost on the issue of confusion and did not pursue the matter further.

Gateway, Inc. v. Companion Products, 2002 WL 34248562 (D. SD., 2003): Gateway involved the famous trade dress of the ‘Gateway Cow Motif’ and a computer accessories designer selling products comprised of several different cow-appearing items which allegedly called the Gateway-Motif to mind. A survey was conducted in the case and published and the judge found the evidence it yielded to be compelling but the survey was designed to show a likelihood of confusion. Even though Gateway prevailed on both the counts of confusion and trade dress dilution, the only published empirical evidence was the confusion assessment and it is well established that proving confusion is an entirely different standard and proposition than proving dilution. Hence, the design of the confusion survey cannot be relied upon as an effective standard for evidencing dilution across the board, even though the designed survey may have worked in this particular case.

I.P. Lund Trading v. Kohler Co., 11 F. Supp. 2d 112 (D. Mass., 1998): This case involved a dispute between two makers of faucets. In holding that there was sufficient evidence of actual dilution the court considered an application of the Mead Data Factors which assess the similarity of the marks, the similarity of the products, the sophistication of consumers, the question of predatory intent, and renown of each of the concerned marks. Through an analysis of these factors the court was comfortable in arriving at the conclusion that actual dilution was occurring. The main problem with this decision is that it offered no real explanation as to how an actual reduction in selling power by loss of distinctiveness was occurring. This case stands for the example that even after Moseley, courts take a wide swath of approaches in deciding what truly needs to be shown to constitute actual dilution and are sometimes prepared to take logical leaps of faith.

Adidas America v. Payless Shoesource, 2008 WL 4279812 (D. OR., 2008): The diversity of approaches to assessing actual dilution is also evident in the Adidas decision which presented a very strong case for dilution of trade dress but did not entail a survey. Instead, the plaintiff’s winning argument utilized an extensive report by a consumer psychology expert who presented a convincing argument that actual dilution could be determined upon the strength of consumer association alone. This case demonstrates how the uncertain standards in proving dilution of tradedress are encouraging attorneys to rely on alternative forms of evidence which may be more cost-effective and less time consuming to produce than surveys.

CONCLUSION

The aforementioned cases nearly constitute the entire universe in which trade dress dilution surveys have been considered or have been a viable option. Their ‘proper construction’ generally remains an open issue and if and when a successful trade dress dilution claim is brought and proven on the strength of a survey, it will likely be a very well studied case. Until such time though, this remains a largely open issue and the existence of a generally appropriate approach to presenting empirical evidence of dilution remains uncertain.

Because of this reality, the continually and rapidly changing consumer experience in an open marketplace and the variety of judicial approaches to what must be shown in substantiating a claim of actual dilution, it can only be said that a savvy approach to the issue must be a flexible one which is not reliant on any one mode of proof.

Advantages and Limitations of Trade Dress Registration (Using iPod Nano Registration as an Example)

By Robert X.

This blog posting discusses the pros and cons of trade dress registration using the iPod Nano as an actual example. The table below contains a drawing for the trade dress registration (registration # 3,365,816, top left) and five different brands of MP3 players found in the market. Can you tell which MP3 player the registered trade dress protects?

Drawing in trade dress registration:


(1):


(2):


(3):


(4):


(5):



The answer is that the registration is owned by Apple Inc. and is based on Apple’s 1st generation iPod Nano. The current and 5th generation of iPod Nano is # 3 in the table. If you cannot match the drawing to any of the players, it is because the design of the iPod Nano has changed from 1st generation to the current generation. (Note: the MP3 players are made by: (1) JWin, (2) Coby, (3) Apple, (4) Sandisk, (5) Coby.)

A photo of the 1st generation iPod Nano was used as part of the evidence in the trademark application file, shown below. Compared to the photo, the drawing does not show color, texture, polish, and build quality of the unit, and the symbols “MENU”, play, back, and forward are missing. The differences between the drawing and the photo are substantial, so is this a problem for the validity of the trade dress registration?




Trademark registration is based on the drawing. The first question is: what is the trade dress this registration is supposed to protect: is it the drawing, the actual iPod as depicted in the photo, or something in between? A common sense answer is that it cannot be something in between because it is undefined as to where in between. One may argue that because the registration is intended to protect the actual trade dress, the registration should protect the actual trade dress based on the photo. On the other hand, the actual photo is only shown in the application file. The examiner examined the application based on the drawing. Over, in a trademark search, only the drawing is shown on the trademark registration. Moreover, if more than one photos are used (for example, showing the iPod’s front, back, and side), which photo controls? So the argument seems to favor the drawing. In fact, this is the view expressed by the 6th Circuit in the dicta in Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP, 423 F.3d 539, 546 (6th Cir. 2005). The case dealt with a registration for the trade dress of an electric guitar where the drawing was 2-dimensional and showed only the contour of the guitar. The court stated: “[W]e do not believe that the two-dimensional drawing included in the LP Trademark should be construed to create a trademark on the entire guitar as depicted in photographs accompanying the trademark application (including the location and style of knobs, switches, and other hardware).” Id.
If the trade dress registration is based on the drawing, then there are questions as to the validity of the registration.

Lack of secondary meaning. In the trade dress application, the color picture of the iPod was used in the declarations filed to prove “acquired distinctiveness.” In each of the declaration, a customer or a sales person vouched that when they see a picture of an iPod, they could immediately recognize that it is an iPod made by Apple. Because the registration is based on the drawing instead of the photo, the proper question should be whether the declarants could recognize the drawing as an iPod. Because the declarations focused on the wrong question, the application failed to show that the drawing was recognized by an appreciable number of relevant consumers as an indication of product origin or sponsorship. Thus, the registration is invalid.
In contrast, traditional stylized (or design) trademark registration has much less of such problem because they are usually simple and distinctive even when reduced to a drawing. For example, the Nike swoosh, the Apple with a bite, and Mercedes Star are simple and distinctive. One can easily recognize these marks by looking a drawing without seeing a photo.

Distinctiveness or genericness. To be registrable, product designs always require a showing of acquired secondary meaning; thus, a product design needs to be not generic to be capable of acquiring secondary meaning. The features that remain in the iPod drawing include (1) the square shape of the screen, (2) the square shape of the entire unit, (3) the circular shape of the control dial, and (4) the arrangement of the square and the circle. The square shape of the screen was disclaimed in the amended application because the examiner thought it was functional. The square shape of the entire unit should have been disclaimed as well because the rectangular shape is generic to most mp3 players. The circular shape of the control is also generic because such dial controls have long been used in TV remote controls and are widely popular on portable electronics. Lastly, the arrangement of the square and the circle is likely generic because there are only two possible arrangements of the square screen and the circular control: the circle on the top, or at the bottom. Overall, the impression of the drawing is so generic that it is unlikely to acquire secondary meaning.
The drawing omitted the symbols “MENU”, play, back, and forward. This would have been a good idea if this were a patent because patent coverage is wider if there are fewer limitations in the claims. However, here it seems that removal of these symbols further renders the drawing unrecognizable as an iPod Nano.

Functionality. There are several factors in analyzing the functionality of a product design for trade dress protection. For brevity, we focus on the fundamental question of whether the exclusive use of the trademarked feature would put competitors at a significant non-reputation related disadvantage. Here we find many products are based on the same simple design, but each with variations (including Apple’s own product, which includes features not found in the drawing). Because the drawing contains only the basic design elements that the other designs necessarily build upon, the other manufactures are likely disadvantaged if they are not allowed to use the basic design elements. Thus, it is likely that the basic design in the drawing is functional.

Changing Product Design. Product designs change faster than traditional trademarks such as logos. For example, the shape of iPod Nano has undergone major changes twice. On the other hand, trade dress registrations must be given narrow interpretation because many products look alike. Thus, as product design changes, the trade dress registration based on the design will likely be abandoned. This is not a huge problem for trade dresses such as the gold fish shape for a cracker because there is no incentive to change. However, the design of an iPod is dictated by its function. For example, the demand for photo and video functions dictates that the current generation has a larger screen.

Advantages of registration despite validity concerns. Trademark registration is inexpensive, and the protection afforded by registration is on top of any trade dress right the owner already has. A federal registration on the Principal Register is prima facie evidence of validity, which becomes incontestable after five years. In case of litigation, registration shifts the burden to the defendant to prove that the mark is invalid. A trademark registration also serves as a nationwide notice to potential infringers. In this case, even if a potential infringer could successfully challenge the validity of the iPod trade dress registration, it cannot say it does not have notice. Then if Apple wins on the merit of the case based on its trade dress right in the iPod itself, the infringement would be more likely to be found to be willful because of the notice.

In applying for a trade dress registration, attention needs to be paid to the drawing to reflect the right amount of detail of the product to get the maximum level of protection. The registration can include a short description, so this should be used to capture additional features that cannot be expressed in the drawing. The registration can take one to two years to complete, so it is probably not worth the effort if the design is expected to change quickly, or if the designs of similar products have been changing every year. Used properly, trade dress registration is helpful to provide additional protection to the brand owner.

Protectable Trademark or Symbol of Oppression?

By Aman S.

For years, activist groups have scrutinized the Washington Redskins and other collegiate and professional teams that incorporate references to or images of American Indians in their mascots. American Indian activists have particularly taken issue with the use of the term ‘Redskins’ by the Washington D.C. National Football League team for its offensive nature as a reminder of an oppressive past. Although fans of the team insist the term actually pays homage to one of the first Redskins’ head coaches who happened to be of Sioux heritage, other activists say otherwise. "Redskin' is the most derogatory word you can use to describe a Native American," says Bill Means, founder of the International Indian Treaty Council. The term originates from the bounty-hunting days, when colonies and companies would pay settlers for killing American Indians. Scalps, called "redskins," were used as trophies and proof of killing because it was too difficult to carry the entire body, says Suzan Harjo, one of the plaintiffs in the suit. "In some cases male scalps could be bought for 80 cents, women for 60 [cents], and children for even less. This term describes a heinous act," Harjo adds. Newsweek

On November 16, 2009, the Supreme Court denied a petition for certiorari in Harjo v. Pro-Football, Inc. The suit, brought by Native American activists, contested the validity of the Washington Redskins’ trademark rights in their name and logo. The six trademarks being challenged included the image of the Native American on the helmet, the image of a spear, the script version of the word Redskins, and the name of the professional cheerleading squad, the Redskinettes. The team registered those trademarks in 1967. The plaintiffs in the case argued that the trademarks are invalid because they are “scandalous, disparaging and may bring Native Americans into disrepute or contempt.” The Lanham Act prohibits the registration of such trademarks (words, logos, symbols) that are proven to be disparaging to a group of people. 15 U.S.C. § 1052(a). Given the history behind the term ‘redskin’, the issue of whether or not the team’s trademark is disparaging would have lead to a contentious debate.

However, the Supreme Court did not address whether the trademark was disparaging but whether the activist group’s claim was barred by the doctrine of laches, a legal technicality similar to a statute of limitations. On appeal, The Washington Redskins successfully argued that the plaintiffs slept on their rights and waited too long to assert their claim. The Supreme Court affirmed the Appellate Court ruling and denied the plaintiffs’ petition for certiorari. The Lanham Act does, however, provide for the cancellation of a trademark “at any time,” when the challenged mark is found to be disparaging. 15 U.S.C. § 1064(3).

Interestingly, on April 2, 1999, the Trademark Trial and Appeal Board ruled in favor of Harjo and the American Indians on the issue of disparagement and ordered that the Redskins’ trademark registrations be canceled. Harjo, 50 U.S.P.Q. 2d 1705 (TTAB 1999). The Washington Redskins then appealed that decision to the U.S. District Court for the District of Columbia. The district court ruled that the activists’ claim was barred under the doctrine of laches.

Although Harjo and the other plaintiffs were defeated in their efforts to invalidate the Washington Redskins trademark, another group of American Indian plaintiffs will now be able to pursue their disparagement claim against the team. That suit, Blackhorse v Pro-Football, Inc., was put on hold pending the outcome of Harjo but is now expected to move forward. We’ll see how the Washington Redskins trademark protection holds up this time around. One important issue to pay attention to will be the millions of dollars that the Redskins have invested in and earned from their trademark since its registration in 1967. The team will have a strong argument that it has created its own Redskins brand through extensive marketing and commerce, which will be an important factor when the validity of the mark is analyzed by the court. Stay tuned.

Poking fun at Paris leads to a lawsuit for Hallmark

KANSAS CITY, Mo. — "That's hot." A lawsuit says that's Paris Hilton's remark.

...

Hallmark Cards says it was just dishing up satire with a greeting card spoofing "Paris' First Day as a Waitress." There's a photo of Hilton's face superimposed on a cartoon waitress telling her customer, "Don't touch that, it's hot." The customer asks, "What's hot?" and the waitress says, "That's hot."

...

Legally, the question isn't "What's hot?" but who owns the rights to "That's hot." A lawsuit against Hallmark, filed last week by the heiress, notes that the federal patent office in February issued to her a registered trademark on the term "That's hot" for its use in apparel.

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Google To Pay Nothing in Keyword 'Sucker's Bet'

Google will not pay American Blind & Wallpaper Factory any fee after settling a suit over its Adwords trademark policy.

As long as Google does not change its trademark policy, American Blind & Wallpaper Factory will drop its suit, according to a copy of the agreement obtained by internetnews.com.

"We are very pleased with this outcome and to note that Google has not paid and will not be paying any settlement fee, our trademark policies remain unchanged, and we've made no special exceptions for American Blind," Google managing counsel Michael Kwun told internetnews.com.

...

Eric Goldman, director of Santa Clara University School of Law's High Tech Law Institute, thinks the now-former plaintiff fell for a "sucker bet" when it decided to sue over the fact that search queries on some of its trademarked terms returned searches from competitors and others.

"I think American Blinds' complete capitulation is the latest reminder to plaintiffs that it's often irrational to bring lawsuits over keywords," Goldman wrote on his Technology & Marketing Law blog.

"This case reiterates that keyword-related lawsuits can be a sucker's bet," Goldman wrote.

If that's true, the latest "sucker" to test the legality of Google AdWords's trademark policy might be American Airlines, which wants Google to stop selling keyword-based sponsored search results tied to any of its trademarks and is seeking punitive damages over the alleged infringement.

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The Name Game (Plus Typos)

THE practice of “cybersquatting” has evolved from the days when people bought a trademarked Internet domain name and hoped to squeeze the trademark owner for some cash. The law is pretty clear on that: you can’t do it.

But now, companies like Microsoft are filing lawsuits against outfits they say engage in a more complicated but potentially much more lucrative practice called “domain tasting” or “domain swiping.”

Here, domains are purchased, and Web pages festooned with advertisements built behind them to see how much traffic the U.R.L.’s attract. If it is not much, the domains are returned to the registrar within five days for a full refund. If the traffic is adequate, the domain is kept, and the domain owner collects money every time someone clicks on one of the ads.

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Agency Rejects .xxx Suffixes for Sex-Related Sites on Internet

A longstanding proposal to create a specialized .xxx suffix for sex-related entertainment Web sites received a final rejection yesterday by the agency governing the Internet address system.
The plan, first introduced seven years ago by ICM Registry, was rejected by a vote of 9 to 5 by the Internet Corporation for Assigned Names and Numbers, or Icann, at a meeting in Lisbon.

Board members who voted against the plan expressed concern that it would compel Icann to become involved in regulating content, among other issues.

Some who objected to the proposal included companies in the sex-related entertainment industry as well as religious groups. The entertainment executives raised fears that use of the domain, although voluntary, could open the way for governments to isolate sex-oriented Web sites into a single part of the Internet.

Others warned that the move would create a bonanza for ICM Registry, since companies with existing Web sites would be compelled to buy .xxx domain names to prevent someone else from creating sites using their company names.

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Community To Fight Martha Stewart's 'Katonah' Trademark

A group of Martha Stewart's Westchester County neighbors has moved a step closer to opposing her efforts to trademark the "Katonah" name.

The Katonah Village Improvement Society voted on Monday to take whatever action it deems necessary to keep Martha Stewart Living Omnimedia's from using the Katonah name for lines of furniture, paints and other homemaking products.

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Cybersquatting Remains on the Rise

The number of cybersquatting disputes filed with the World Intellectual Property Organization (WIPO) in 2006 increased by 25 percent as compared to 2005. In a related development, the evolution of the domain name registration system is causing growing concern for trademark owners, in particular some of the effects of the use of computer software to automatically register expired domain names and their "parking" on pay-per-click portal sites, the option to register names free-of-charge for a five-day "tasting" period, the proliferation of new registrars, and the establishment of new generic Top Level Domains (gTLDs). The combined result of these developments is to create greater opportunities for the mass, often anonymous, registration of domain names without specific consideration of third-party intellectual property rights.

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NFL marketers want 'Big Game' trademark

The National Football League is so popular, it can get away with applying Roman numerals to its championship game. It is a corporate colossus that vigilantly protects its trademarked terms, like the words "Super Bowl,'' "Super Sunday," "NFL'' and the names of teams.

Each year it sends out cease-and-desist letters to businesses and advertising firms demanding that such terms not be used for commercial purposes.

But now the NFL is pushing into Cal and Stanford territory.

The NFL wants to trademark the phrase "The Big Game."

But the Big Game also has a very specific application for Stanford University and UC Berkeley, whose annual football game dates back to 1892. It has been known as the Big Game since 1902, according to San Francisco author Ron Fimrite, who is writing a history of Cal football.

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Cisco Sues Apple for Trademark Infringement

SAN JOSE, Calif., January 10, 2007 - Cisco® today announced that it has filed a lawsuit in the United States District Court for the Northern District of California against Apple, Inc., seeking to prevent Apple from infringing upon and deliberately copying and using Cisco's registered iPhone trademark.

Cisco obtained the iPhone trademark in 2000 after completing the acquisition of Infogear, which previously owned the mark and sold iPhone products for several years. Infogear's original filing for the trademark dates to March 20, 1996. Linksys, a division of Cisco, has been shipping a new family of iPhone products since early last year. On Dec. 18, Linksys expanded the iPhone® family with additional products.

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